Clayton Industries: Peter Arnell, Country Manager for Italy

Essay Info: 3310 words.

‘Clayton Industries: Peter Arnell, Country Manager for Italy’ case analysis

Question:

Questions 1.a. Evaluate Peter Arnell’s first two months as general manager of Clayton SpA. 1.b. What are the main challenges he faces? 1.c. How well is he dealing with them?

Question 2.a. Review the three possible courses of action outlined in the last page of the case. As Arnell, which plan would you recommend to Dan Briggs and Simonne Buis next week? 2.b. What problems and constraints might limit your strategic recommendations? 2.c. How could you deal with those issues? (For each option, create a table of pros and cons)

Question 3.a. How would you convince your bosses to back your recommendations (be prepared to defend your preference with convincing arguments backed by strong data analysis). 3.b. How would you roll out your preferred strategy?

Question 4. Was Arnell the right choice to be country manager for Clayton SpA?

Introduction

Clayton Industries Inc. was founded in Milwaukee in 1938. The company had built a successful business around window-mounted room air conditioners, which it sold for residential and light-commercial applications. In the early 1980s, Clayton expanded in Europe by acquiring four companies: Corliss in UK, Fontaire in Belgium, Control del Clima in Spain and AesoPuro, Italy-based manufacturer of compression chillers for large commercial, public, and institutional installations. Clayton Europe appointed four country managers, who all had responsibility for sales of Clayton products in their home country and their export market in Europe.

In 2001, Simonne Buis, president of Clayton Europe, set targets that required to slash costs, build scale, or both. Over the next seven years, Europe became major growth engine for Clayton, increasing its share of the company’s global revenue from 33% in 2000 to 45% by 2009. However, as the economic crisis deepened in 2009, Buis established two plans for all country managers: a) to achieve a 10/10/10 plan to cut both receivables and inventories by 10 days, and reduce headcount by 10%; b) to prepare plans showing how the product would be in the top four in European market share within four years (Top Four in

Four objective).

For Clayton SpA (Italy) that would be a real challenge. The company recorded a 5.3% sales decline in 2008, followed by a 19.4% drop in the first half of 2009 (loosing more than $1 million a month). As a result, receivables